An expansionary monetary policy shifts the MP curve to the ________, reducing ________, everything else held constant.
A) left; output and increasing interest rates
B) left; both real output and interest rates
C) right; both interest rates and real output
D) right; interest rates and increasing real output

Question

Quizplus · Accepted Answer

An expansionary monetary policy involves an increase in the money supply and a decrease in interest rates, which shifts the MP curve to the right. This results in an increase in both interest rates and real output, making D the correct choice.

An Expansionary Monetary Policy Shifts the MP Curve to the ________